Housing Minister dismisses fears that regulation will force small landlords out

Housing Minister Matthew Pennycook has rejected claims that more regulation will drive small landlords out of the market.

During a debate in Parliament, Conservative MP Edward Leigh warned that imposing more regulations on small landlords would cause them to leave the private rented sector, ultimately harming vulnerable people.

However, Mr Pennycook said that “not all regulation is bad” and argued that under the Renters’ Rights Act, landlords would be able to rely on simpler grounds for possession.

Do not accept that all regulation is bad

In oral questions to the Housing, Communities and Local Government, Mr Leigh asked Mr Pennycook whether regulations could cause more harm than good.

He asked: “We all know that rent inflation is caused by over-demand and lack of supply, and we can agree on the need to address problems by building more houses and tackling immigration.

“Does the Minister agree that the more controls and regulations are imposed on landlords, particularly small landlords, the more they will get out of the rented sector altogether, causing less supply and rent inflation, which will hit vulnerable people?”

In response, Mr Pennycook claimed the build-to-rent market will form an important part of the market in the coming years.

He said: “I do not accept that all regulation is bad. In many ways, we have clarified and made simpler the grounds for possession that landlords can use under the Renters’ Rights Act, but he is absolutely right to say that we need more supply of all homes, including in the private rented sector, and that we need to support the build-to-rent sector, which will be an important part of the market in coming years.”

Government does not support rent controls

Elsewhere during the debate, Labour MP Dan Carden welcomed the Renters’ Rights Act power to tackle unfair rent increases but was concerned that market rents would be used as a benchmark to prevent unaffordable rents from rising, and called for rent controls.

In response, Mr Pennycook claimed rent controls were not part of the government’s plan.

He said: “We will of course, keep the implementation of the Act under continual review, but, as I have said, it allows tenants to challenge unreasonable rent increases at the first-tier tribunal, which will make a judgment on whether the increases are fair and meet that market-rate definition.

“We have, however, made it clear that the government do not support the introduction of rent controls, including rent stabilisation measures, for the reasons that we debated at some length during the passage of the bill.”

You can watch Mr Pennycook’s response to Conservative MP Edward Leigh below.